Entrepreneurship

Entrepreneurship definition
Entrepreneurship has been traditionally been define
as the process of designing, launching and running a new
business, which typically begins as a small business, such as
start up company, offering a product, process or service for
sale or hire, and the people who do are so called
“entrepreneurs”.
It is been define as the capacity and willingness to
develop, organize and manage a business venture along
with any of its risks in order to make profit.
 Common Traits and Characteristics of an
Entrepreneur
1. Proactive
- they address issues, problems, and challenges
before they come rather than when they already
happened.
2. Innovative
- the mind of entrepreneurs are rich with big ideas
that can add value to their existing business. They do not
stop improving and thinking of new ideas for their
business
 Common Traits and Characteristics of an Entrepreneur
3. Decisive
- always have a decision about their business.
They do not settle for gray areas or unclear
solutions.
4. Sociable
- an skill used to establish relationship with its
people and customers. Relationship management
is the key for employees and customers retention.
 Common Traits and Characteristics of an Entrepreneur
5. Self-awareness. He knows who he is, what he
is good at and what he likes to do.
6. Self motivated. This is what gets him going and
keeps him moving when he is in business.
7. Courage. Willingness to take risks, willingness
to take the chance.
8. Confidence. By behaving as if one already is a
success. Always having positive thinking.
 Common Traits and Characteristics of an Entrepreneur
9. Patience. The ability not to show annoyance to
people or events when they o not go on one’s way.
10. Experience. Knowledge or skills derived from
previous experience.
11. Knowledge. Knowing as much as possible factors
regarding the business and competition.
12. Risk-taking. Entrepreneurs are known for their
“calculated” risk taking.
 Important Entrepreneurial Traits
1. Hard work 9. Take Initiative
2. Self-confidence 10. Willing to listen
3. Future oriented 11. Copes with uncertainty
4. Profit oriented 12. Committed
5. Goal – oriented 13. Risk-taker
6. Persistence
7. Copes with failure
8. Responds to Feedback or Open to Feedback
Recognize a Potential
Market
 Entrepreneurial Process

1. Opportunity spotting and assessment.

2. Developing a Business Plan
3. Determining the Capital Needed
4. Running the Business
 Components and Steps
1. Opportunity spotting and assessment
- Evaluate, conceptualize and measure the
identified opportunity.
- Do Cost-benefit analysis of the opportunity
including risks analysis
- Match the opportunity with entrepreneur’s skills
and objectives
- Scan the strengths and weaknesses of competitors
 Components and Steps
2. Developing a business plan.
- Come up with a business description
- Perform industry analysis
- Come up with marketing plan.
- Prepare operations plan; financial plan
- Identify strategies
- Perform monitoring and control
 Components and Steps
3. Determining the Capital Needed
- Calculate the needed capital/ startup capital
- Choose the most cost-efficient suppliers or service
provider.
- Develop contact and relationship with suppliers
and service providers
 Components and Steps
4. Running the business
- Practice leadership as a way of life.
- Recognize critical success factors
- Identify existing and foreseeable problems and
issues.
- Employ risk-mitigating control and monitoring
control
- Devise an expansion/ sustainability strategy.
 Opportunity spotting and assessment
The 3S of Opportunity spotting and assessment
- Opportunity Seeking
- Opportunity Screening
- Opportunity Seizing

An Opportunity is an entrepreneur’s business idea that

can potentially become a commercial product or service in the
future.
 Opportunity spotting and assessment
1. Seeking the Opportunity
• Entrepreneurs have endless curiosity to discover
new or different ideas and see whether these
ideas will work in the marketplace.
• Entrepreneurs creates value by introducing new
products or service or finding better ways of
making them.
 Opportunity spotting and assessment
S1 - Sources Of Opportunity
1. Macro Environmental Sources of Opportunities
Socio-Cultural Environment – represents a general view of
a locality's tradition, customs, belief, norms and perceptions.
These factors affect how a person of the locality behaves
and reacts to marketing and selling activities.
Political Environment – defines the governance system of
the country or the local area of business. It includes all laws,
rules and regulation that govern business practices as well as
the permits, approvals, and licenses necessary to operate
the business.
 Opportunity spotting and assessment
Economic Environment – supply and demand forces mainly
drive economic environment.

Ecological environment – include all natural resources and

the eco system, habitat of men, animal plants and minerals.
Opportunities abound for greener, cleaner, healthier and
organically-grown products

Technological Environment – new scientific and

technological discoveries, which often lead to the launch
and commercialization of new products.
 Sources of Opportunity
2. Industry source of opportunity
Identifying the participants in the industry.
• Rivals or competitors in a particular type of
business.
• Suppliers of input
• Consumers market segment being serve by rivals or
competitors
• Substitute products or service which customers shift
or turn to.
 Sources of Opportunity
3. Market Sources of Opportunities
- A market opportunity is the existence of a
need that is not being met or a desire that is not
being fulfilled. This is the beginning of every
business opportunity.
- Entrepreneur must also be able to measure
the actual demand and supply as well as the
potential demand and supply of the industry that
the enterprise belong to.
 Sources of Opportunity
4. Micromarket – refers to the specific target
market segment of a particular enterprise. These
are the target customers that represent the
immediate customers of an enterprise.
5. Consumer Preferences
* Consumer preference – refers to the tastes of
particular groups of people (clothes people wear,
food they eat, music they listen, etc.)
 Sources of Opportunity
6. Inventing new product or service.
7. Adding value to existing product
8. Franchising
9. Mass media
10. Looking within yourself and examine skills,
talents and passion.
S2 - Screening the Opportunity
Opportunity Screening
Is the process of cautiously selecting the best
opportunity.
Business Opportunity Elements:
1. Has superior value to customers.
2. Solves a compelling problem, issue, a need or a want
3. Is a potential cash cow.
4. Matches with entrepreneur’s skills and resources
 Potential Market

Market potential analysis is a system used by

business to analyze potential a market with the aim of
finding out how viable such a market is with regard to the
product that a company/ business has to offer.
 Potential Market
Identify the Market Problem
Market problems are your target market's stated or silent problems. This
could refer to existing inefficiencies, awkward workflows or non-optimal
solutions. The key to finding a market problem is to listen for frustrations, or “if
only” statements, that arise during interviews.
Market consists of:
• Existing customers: People who have already purchased your product
• Prospects: People who have not yet purchased your product but are
considering it
• Target market users: People in your target market who are not currently
looking for a solution
Propose Solutions in Terms of Product or Service
Analyze the Market Need
The main goals of a market needs analysis are to identify the
best-fit market for the idea, gain early and sustainable competitive
advantage prior to concept development and product build-out and
to estimate the market size.
A market analysis gives marketing plan direction because it
identifies and profiles target market and its needs.
Market needs tell you what features of product will appeal to
target customer so you can frame marketing message to emphasize
those features.
 Propose Solutions in Terms of Product or Service
The Product or Service will meet a Need
Whenever you evaluate an opportunity, ask yourself if there is really a
need for the product or service.
Develop new products and services with the help of customer feedback
about older products and services.

Screen the Proposed Solutions based on Viability, Profitability and Customer

Determine market viability for a product or service.
Perform market research – evaluation of potential size and characteristics of
consumers.
Analyze Competitors – comparison of products or service features, strength
and weaknesses.
 Propose Solutions in Terms of Product or Service
Profitability of the Business
Business exist to make a profit. That is to sell
products/ services to the public at a price higher than
what you have paid. Running a business is to try and
keep business expenses (everything from cost of goods
to rent to bill to insurance to paying employees) low so
you can charge a lower price for products/ services and
still make a profit.
 Customer requirements
Customer requirements refer to the
specifications or features of a product or
service that are deemed necessary by
customers. These requirements motivate
customers to buy a product or service. To
determine customer requirements, companies
can research their target market to
understand their desires and needs.
 How viable is my business idea?
1. Uniqueness - How do you stand out from others?
2. Customer - Who are your customers?
3. Competition. Who and how can you do better than your
competitors?
4. Financing the venture. How much would you need to finance your
new venture?
5. Marketing strategies
 Profitability
Is a business‘ ability to gain profit from its business activities and
investment.
Sample format: of Income Statement
Gross Sales
Less: Cost of goods sold
Net Sales
Less: Operating Expenses
Net Income
Used to measure profitability
Return on investment (ROI)= Net Income
Cost of investment or Capital

Payback Period = Initial Investment

Net Profit

Return on Sales = Operating Profit

Net Sales